This paper proposed a new smart home community architecture in power system, in which community controller will acts as a virtual power distribution company. The traditional real time pricing schemes may not be effectively implemented in terms of reduction of power peak to average ratio over the large number of end consumers. To overcome this problem, a true real time pricing between community controller and community end users is developed based on real time pricing and inclining block rates. The proposed pricing scheme implemented in the community is charged at the end of a day according to the combined load of the community. To schedule the electric appliances in a combined way, we have developed a power scheduling algorithm as well. The simulation results have revealed that by applying anticipated technique of pricing scheme in group of households, the consumption cost of end consumers decreases and the overall power peak to average ratio reduces as well which will be beneficial for the utilities. (C) 2015 Elsevier Ltd. All rights reserved.